Management Dialogue
Norman Chan: Positioning is Key 222
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    To help achieve our vision of becoming the most admired commercial property developer in mainland China, the Leasing & Management Team work day and night to make it a reality. In this issue's Management Dialogue, we speak to Executive Director, Norman Chan, who oversees a team of over 3,000 talented individuals in the Leasing & Management Department, to understand how the team manages our entire leasing portfolio in Hong Kong and on the Mainland.


    Staying Ahead of the Competition

    Over the past few years, there has been fierce competition and the economy has been challenging. Chan said that, to succeed, we need to have a deep understanding of the market. Positioning is key, we need to have a very clear picture of where we stand in each city vis-à-vis our competition, and then define our unique positioning to stand out from the crowd.


    With 10 projects in eight Mainland cities, Chan explains that it takes time to fine-tune positioning in line with the constantly evolving market and changing shopping patterns, influenced greatly by technology. This is reflected in the long term performance of the malls. "The positioning of our shopping malls on the Mainland has always been as the best of the breed, while in Hong Kong positioning fits into a specific location and market," said Chan.


    Looking at Plaza 66, it has a defined position as the Home to Luxury not just in Shanghai but on the Mainland. With 18 years of history, we have established a very close relationship with our tenants and have worked together to develop a place in the market that is uniquely ours. For Jinan, Parc 66 appeals to a wider audience as a venue to socialize and be seen in the city. Sometimes, geography and demographics can have a particular effect on a mall. We have to find that very special element in each city and build the brand around it.


    Hang Lung has a different strategy for its Hong Kong malls. We have the attributes to define our place in segments other than pure luxury. Hong Kong is a truly international city with broad cosmopolitan tastes, which we need to tap in order to resonate with our customers. We use impactful thematic advertising to celebrate our positioning, as in the campaign series Fashion Intelligence for Fashion Walk in Causeway Bay.


    Constant Improvement

    Over the past six years, the Company has upgraded our properties in Hong Kong and Shanghai. Chan said, "We started our Asset Enhancement Initiative (AEI) in 2012 and have invested over HK$2 billion since then. To stand out from the crowd and become first-tier shopping malls on the Mainland, we need to have the best hardware. We took advantage of the economic down-cycle and took steps to enhance our competitive advantage." Plaza 66 has already reaped the benefits with unprecedented growth, and in Hong Kong, Grand Plaza and Fashion Walk have also completed their enhancement works with pleasing results. Grand Gateway 66 and The Peak Galleria are now in the process of their AEI. When complete, Chan said it will further add to the Company's competitive advantage.


    "We have been actively managing our portfolio to suit changing consumer demands and have worked closely with our tenants as business partners. The key element is customer experience," said Chan. He explained that our strategy is to capture the types of stores and dining experiences our target consumers will respond to, and to be at the forefront of market trends. In addition to having key tenants that drive traffic and sales, we are also seeing a new emphasis on smaller specialty stores that bring new experiences and add a sense of novelty. Also, some malls are making greater use of temporary, flexible spaces that can accommodate new retail ideas for shorter, pre-defined periods. Pop-up stores, product introduction spaces and kiosks provide customers with a sense of the unexpected and give them a reason to treasure hunt. We have applied this strategy to our malls in both Hong Kong and the Mainland, from the most recent Prada Spirit pop-up store at Plaza 66 in Shanghai, a collaborative event with T-Mall during the Double 11 at Riverside 66 in Tianjin, to the Campbell Soup event at Gala Place in Mongkok.


    When asked about how online shopping has affected the shopping mall business, Chan explained that e-commerce would not replace quality shopping malls. People are by nature social beings, requiring interaction and sense of community. A mall that is rich in content and services plays an important role in people's life. Online shopping offers speed and convenience, widening choices and expanding overall consumption. With good planning and execution, on- and off-line collaboration (O2O) can produce multiple winners. It in fact also presents new opportunities for our malls to engage consumers. Chan used Apple and Xiaomi as examples. Consumers will go to our stores to experience and purchase the products, then place order online or end up going back to the stores to buy more, thus bringing traffic and value to the mall they visit.


    Apart from this, in order to understand what consumers want, we need to reach out to our customers directly. We have launched Customer Relationship Management (CRM) initiatives to build our own consumer database and to present customized offers, gift ideas, and other targeted marketing collateral. The Company has made headway in transforming from B2B to B2C.


    Centralized Departments to Increase Efficiency

    Going through the department organization chart, apart from mall management and operations, you would notice departments like Central Leasing, Central Office Leasing, Business Planning and Central Marketing. What are their functions and what does their work entail? Chan said in order to manage our diversified leasing portfolio, we need a central team to guide, coordinate and negotiate multiple deals. "We have over 2,000 business partners, with quite a number of them being common tenants across the portfolio. We would serve our own interest and that of our partners best if we can have a central point of contact." The structure enhances our efficiency, improves interaction with business partners, and helps to develop long-term relationship and trust between ourselves and our tenants. With these aims, we also created the Central Marketing team to source and introduce international elements, provide quality control and generated synergy. As for Business Planning, they are the eyes and ears behind our strategies. The team conducts thorough analyses of every aspect of our business including demographics, competition, market trends, and more, so that Management can make informed decisions.


    We were able to get a glimpse of what actually goes on in the Leasing & Management Department in this interview. Nothing is too trivial and the team leaves no stones unturned. Positioning is all it boils down to at the end of the day.


    When asked about his management philosophy, Chan said it is all about people, our colleagues. We need to discover and engage the right talent in the right roles. It's about teamwork and also letting each person's individual potential shine. Never forget to give them a pat on the back in a timely manner for a job well-done or in situations where there is uncertainty or room for improvement, provide direction and guidance with clarity and speed.


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